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Payments To Non-Striking Employees Made at Employer’s Peril

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Labour, Employment and Human Rights Bulletin

The Labour Relations Act ("LRA") contains provisions that aim to protect employees from being unfairly discriminated against as a result of exercising one or more of the rights in the LRA. Prejudicing an employee based on the fact that the employee took part in the activities of a trade union, which were lawful, is one of the prohibitions in the LRA.

In National Union of Metal Workers of South Africa obo Members v Element Six Production (Pty) Ltd, the Labour Court had to determine whether, the payment of a token of appreciation to non-striking employees who had performed additional work during a national protected strike, was discriminatory within the meaning of section 5 of the LRA.The specific provisions relied on were:

" 5. Protection of employees and persons seeking employment

  1. No person may discriminate against an employee for exercising any right conferred by this Act.
  2. Without limiting the general protection conferred by subsection (1), no person may do, or threaten to do, any of the following-

(c) prejudice an employee or a person seeking employment because of past, present or anticipated –

(iii) participation in the lawful activities of a trade union, federation of trade unions or workplace forum;
(vi) exercise of any right conferred by this Act;"

Element Six employed approximately 980 employees. On 1 July 2014, certain of its employees who were members of NUMSA, UASA and SAEWA commenced a protected strike at its Spring's plant in support of national demands tabled at the MEIBC. It was anticipated that the strike would last for three weeks. Prior to the commencement of the strike, Element Six's employees had worked overtime to ensure that there were sufficient stock piles to meet client demands during the strike. 

The strike lasted longer than expected. Certain employees who did not participate in the strike performed additional tasks during the strike in order to meet client demands. The strike ended on 28 July 2014. On 6 August 2014, Element Six decided to pay a token of appreciation to employees who:

  • had worked for at least 10 days during the strike;
  • were permanent employees; and
  • had made a positive contribution to running production during the strike. 

NUMSA sought an order declaring that Element Six's conduct in paying the token of appreciation to certain employees who did not partake in the strike constituted discrimination in terms of section 5(1), 5(2)(c)(iii) and 5(2)(c)(vi) of the LRA and  that its members who had participated in the strike, also be paid the amount of the token of appreciation. 

In coming to is decision, the court accepted the argument advanced by NUMSA that in order to demonstrate a contravention of section 5, a party was required to demonstrate "discriminatory conduct that was actuated by an illicit reason" and that in order to determine whether the payment was unfairly discriminatory, there needed to be an enquiry into whether "rational and objective criteria were used in assessing  who the beneficiaries of the payment were and whether [Element Six] intended to unfairly discriminate against striking workers."   

Following from this, the court found that NUMSA had on the facts demonstrated that there was in fact differentiation which amounted to discrimination and that Element Six had failed to show that this discrimination was fair because, amongst other things, Element Six was unable to show that the criteria applied in making the payments were fair and objective in that:

  • both the striking and non-striking employees had gone the "extra mile" to assist the business during the strike to meet its client demands;
  • the criteria that the employee be permanently employed in order to qualify for the token of appreciation could not justify the differentiation as the striking employees were equally permanent employees and had equally positively contributed to the running of the business during the strike as they had gone the "extra mile" before the strike; and
  • the requirement that the non-striking employees work at least 10 days during the strike undermined the employers explanation that  the token of appreciation was paid following additional work that was done to cater for the last week of the strike when stocks were depleted.

In determining the relief to grant, while the court issued a declaratory order that Element Six's conduct in paying the token of appreciation contravened the relevant provisions of section 5 of the LRA and that it was prohibited from engaging in any such conduct in future, the court held that it was not competent for it to grant the striking employees monetary relief, namely payment of the amount of the token of appreciation. In this regard, the court relied on the Labour Court decision in FAWU & others v Pets Products where the court, confronted with similar facts, namely ordering that compensation be paid to striking employees in an amount equivalent to a voucher paid to non-striking employees, held that "… were [it] to grant the applicants' request, then [it] would, in effect, compound or condone the illegitimate conduct of the respondent. Quite simply, two wrongs do not make a right." 

Coupled with no order as to costs, Element Six for all intents and purposes managed to get off very lightly.  That said, employers need to be extremely cautious when considering how to compensate non-striking employees for additional tasks performed during a protected strike as it may fall foul of section 5 of the LRA and a court adjudicating any potential claims against an employer may not be as lenient as in this case.

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